Wire and cable private enterprises need reform and upgrading

In the wire and cable industry, the call for “strengthening the industry” and “improving industrial concentration” for China's wire and cable industry “large but not strong” and “low industrial concentration” are heard. In today's wire and cable industry, state-owned enterprises are already very few, and more than 95% are private companies. Therefore, to enlarge and strengthen the wire and cable industry and increase industrial concentration, it goes without saying that many private companies need reforms and upgrades.

Since the 1980s, more than 120 wire and cable companies originally designated by the country have all been transformed into joint-stock companies, joint ventures or private companies. Local state-owned small wire and cable companies have become almost privately owned companies. As a result, the six leading private companies in the state-owned cable industry have ceased to exist and private companies have blossomed. The entire wire and cable industry has lost its roots. The vigorous development of private enterprises has become an embarrassment, the government has no control, and it has entered the “vicious industry expansion” situation people now see.

The accumulation of original capital was gradually formed. In the process of its accumulation, the development of private enterprises is influenced and restricted by the owner’s business philosophy, market demand, and government jurisdiction. These influences and constraints have brought many contradictions and problems to private companies.

When Professor Liu Yongxu, Dean of the School of Economics of the Central University for Nationalities, was interviewed by a reporter from the China Economic Times, a profound analysis of the status quo of private companies in China is equally applicable to the wire and cable industry. Professor Liu Yongji pointed out: Although China’s private companies have developed rapidly, there are many contradictions and problems that should be taken into account. The development of private enterprises faces both the general contradictions shared by private companies and special contradictions.

The general contradictions faced by private companies are: First, the contradiction between private capital and wage labor, which is inborn; Second, the contradiction between the limited market, unplanned nature, and the unlimited expansion of private companies, The market capacity is limited, while the instinct of private companies is unlimited expansion; the market itself is unplanned, while the private investment is blind; Third, the contradiction between capital appreciation and profit realization, because the market is limited, blind investment is bound to Caused excess capacity. The origin of these general contradictions is the imperfection of private ownership capital and market economic system. It is an inevitable consequence of the country’s economic transformation. This is also one of the important tasks of the country’s industrial macro control, and it is not a private enterprise that can overcome itself.

Professor Liu Yongji pointed out that there are still ten special contradictions in private companies:

First, congenitally insufficiency, many of the earliest private companies only started from the mid-1980s. They did not have sufficient accumulation, and they did not have a large amount of capital. Second, private companies were supported by policies and had natural attachment to political power. Third, the collusion between the government and the business is commonly found in the ranks of private companies. Private companies have to bear the weight of bureaucratic capital. Fourth, private companies also have problems with unclear property rights. Many private companies are often unclear because of unclear property rights. Internal "fight"; Fifth, private companies are mostly family-run, corporate structures are not modern enterprise systems; sixth, smallholder awareness is strong, and "small traders" are lagging behind in management; seventh, private firms often do not invest in reproduction after generating profits. Instead, wasteful consumption and extravagant consumption are carried out. A large number of private entrepreneurs do not possess the spirit of western entrepreneurs. Eighth, they have low levels of technology and do not pay attention to investment in technological transformation. Ninth, they are quick to gain instant benefits and have no long-term planning. Lack of social responsibility, waste of resources, and damage to the environment.

In fact, the above-mentioned ten major contradictions in private companies listed by Professor Liu Yongji seriously hampered the development of enterprises. In the wire and cable industry in China, apart from the large private companies that have achieved great success, the vast majority of private companies are still unable to extricate themselves from these ten major conflicts. This situation is particularly evident in the Pearl River Delta and the Yangtze River Delta where “the economy of small bosses has blossomed everywhere”. In the face of economic turmoil, bosses “run the road”.

When people are shouting out at the moment of rectifying the wire and cable industry, government agencies and companies should do the following:

First, government authorities should provide education, assistance, and support for companies in terms of professional ethics, industrial policies, product quality, technological progress, and enterprise transformation and upgrading, rather than revealing or revoking licenses if problems are discovered. In this regard, Yixing City of Jiangsu Province and Wuwei County of Anhui Province have already set a good example, making the private development of wire and cable companies healthy and orderly.

The second is that the quality supervision department can no longer carry out random inspections of product quality with the purpose of fines, but should also provide quality guidance and technical skills for enterprises.

Third, there are many disadvantages of private companies, should be successful private enterprises as an example, and gradually self-improvement, to overcome blindness, the use of modern management methods, improve operational capabilities, enterprise grade, product level, out of the "small business" and "small boss The "small circle of economy" keeps pace with the times.

Faced with a very large private enterprise team, if the wire and cable industry wants to become bigger and stronger and become the world’s second largest wire and cable industrial country, it must use private companies as the starting point to guide private enterprises to self-improvement, self-protection, and real realization. Enterprise transformation and upgrading.